Securities and Exchange Commission of the United States has opened a can of worms recently by executing an investigation on a Coinbase employee in the matter of Insider Trading. The implication is enough to open a raft in the cryptocurrency community and spark a strong reaction from the market. On the other hand, the Commodity Futures Trading Commission commissioners are also coming forward to make their comments on the matter.
According to media reports, CFTC officials are calling on the government regulators to step in and increase the legislative imposition on the entire cryptocurrency market. CFTC Commissioner Caroline Pham recently commended SEC efforts and called it a great example of government writ in the crypto sector. On the other hand, cryptocurrency traders are worried about the possible outcomes and aftermath of the Coinbase controversy.
Insider Trading and SEC
Upon the notice issued by SEC, DOJ has also issued criminal charges for Ishan Wahi, a Coinbase worker who offered his services as a product manager at the firm. Wahi was joined by a few other associates at Coinbase allegedly to conduct Insider Trading. Meanwhile, the prosecutors at Securities and Exchange Commission are working on bringing a civil case against Coinbase.
On one end, the DOJ is pressing charges in lieu of wire fraud while the SEC prosecutors are preparing to try the purported parties in the light of securities violation. In addition to the Insider Trading charges, SEC has also expanded its lawsuit radius by alleging that nine tokens used in Insider Trading are digital securities. The main reason for the involvement of the CFTC is the allegations of SEC lawyers who presented the tokens as digital securities.
SEC’s Lawsuit against Coinbase
CFTC Commissioner Phan told the media that SEC allegations against Coinbase and its employees have much bigger implications on the future of the cryptocurrency market. She also claimed that it is important for cryptocurrency organizations to step up and accept expert input for better regulatory clarity. Another CFTC commissioner Kristin Johnson claimed that financial markets and regulatory agencies in the country are working in tandem with each other.
Meanwhile, Jason Gottlieb, who is the chairperson at White Collar and Regulatory Enforcement Group founded by Morrison Cohen, claimed that CFTC regulates commodities.
Furthermore, Gottlieb added that the Securities and Exchange Commission is trying to push a case with insufficient technical grounds. He emphasizes that CFTC has the appropriate legislative authority in the Coinbase case while SEC is trying to get a shoe in the matter by making preposterous claims about digitized securities.